The effects of the crisis on aviation in South America

In this delivery we review a report of OAG referring to the effects of the crisis generated by the COVID-19 in aviationón of On América.

One of the más important anal portalsíAviac Ticosón presentó Last week a detailed report regarding the effects that the world health crisis will haveá About the delicate industry toéaviation areaón in Sur América, Within a complex recovery panoramaón.

With the PAíses of the regionón aún closed, where úThere are only Flights in Ecuador, Chile and Brazil, This panorama puts an important challengeíor to the actors of the industry, that among the known measures and few options to get out of this situationón, they find each other: Help of governments (míWe a help to the sector and tourism), reductionón of the fleet, N adjustóMina and included, close operations.

With a recoveryón what to beá slow and painful (especially for workers), taking into account that he couldíto take Más de 4 añthe monún HERE, On Américh is one of the m regionsás affected worldwide by the caíday of the tráI'm theéreo y así The data is checkedíOAG stics:

From the first week of April, The programmed flights to and from the ten marketsáBig Am'séRica del Sur have decreased between a 80% and a 90% compared to an ATRás. At approxída occurred abruptly and, usually, aún has not shown signs of recoveryón.

For now, Argentina, Colombia y Perú They have less than 3% of the operations that had añO; the aviationón isá práCutically stagnant. Brazil and Chile areá going a little better, with the 20% Of capacity. Only Bolivia and Venezuela have limited the impact to less than 50% of the flights, But these are significantly m marketsás smallños.

Nevertheless, in these 10 paíSouth American ses, The national capacity representó the 80% of all aircraft seatsígirls in 2019, However, even Brazil, With its great domestic market, saw a caíMassive in the activity of the airlineídenies.

In the úlast weeks, Both Latam and Avianca have entered Capíleakage 11. While Latam can arise with the help of solidarity shareholders, the situationón for avianca is less clear. the airíNEA Guestó Much of the restructuringón of the debt of 2019 And I sufferedó más when the Colombian government Ceró the space toéColombian reo in response to Covid-19. Más smallñor but important for Ecuador, Tame también dejó to operate in May when the Ecuadorian government decidedó Liquidate the airlineínea.

On 2019, These three airlineíNeas contributed to the 43% of all the programmed capacity in these 10 países. It's not extrañar that the aviationójesting. In Brazil, the marketáS big so far, They have represented a third of all the capacity, But elsewhere, In colombia, Chile y Perú, three out of five seats operated or Más. Your disappearanceón if they do not leave the protectionón by bankruptcy to leaveá A significant hole in the aviationóSouth American.

A look at Ecuador, for instance, shows that the PAís has más potential for services toéinmates of what is recognized by the real services that have been operating. From 2010, the average commercial capacityó a decreaseón of the 2.8% eachñO. By contrast, THE NEIGHBOR PERú has seen its ability to grow an average in 10.5% eachñO. Bolivia, Chile, Colombia and Argentina alsoén have experienced a growth of más of the 5% annual.

As for the propensión average to fly to Ecuador, expressed as an proportionón of núAerulo reservations mereíNeas to Tamaño from the townsón, Ecuador, together with Argentina, Uruguay, Paraguay and Venezuela, All couldíto have grown without pandemic.

As in any other place, the aviationón and AméRica del Sur Está In the middle of a great shock. It is too soon to have an idea of ​​Cómo será The market in añO, or two or three. Nevertheless, The fault, or the potential failure, Of some important players has the potential to create new opportunities for investors who can look at this market with new eyes.